History May Repeat Itself
Aug 02, 2018
By Daniel Kelley: Normal, Illinois
President Trump wants to give $12 billion to farmers like me, to make up for the losses we’re suffering from America’s trade wars.
I appreciate the gesture. Rural Americans have faced several years of low commodity prices—and China’s new 25-percent tariff on U.S.-grown soybeans and other products will make it even harder for us to escape this rotten economic cycle.
Farmers know how much the Trump administration has done for us, from last winter’s tax reform to the ongoing cause of regulatory relief, which we desperately need.
Yet we’re anxious about the future because we depend on a global economy for our livelihood—and rather than accept aid, we’d much rather trade.
American agriculture is the best in the world. We grow far more food than our country can eat, exporting massive amounts to the rest of the planet. This creates opportunity and jobs in the United States and also improves our trade balance with other nations.
The trade wars threaten everything. We’re risking long-established connections and partnerships. Good may yet come from these conflicts, from the recent news of President Trump’s possible breakthrough on trade with the European Union to the prospect of an improved NAFTA.
Even so, we have yet to see the White House conclude a single favorable trade agreement.
The one deal it’s now offering to farmers—a $12-billion package of payments to offset losses from new tariffs—won’t solve all of our problems.
It might even make them worse, if history is any guide.
I remember the mistakes of Jimmy Carter’s presidency. In 1979, he halted grain shipments from the United States to the Soviet Union, a major customer. He had a good reason: The Soviets had invaded Afghanistan, in a flamboyant bid to expand their Communist empire.
Unfortunately, President Carter’s policy of an embargo didn’t stop Soviet aggression, but it sure did hurt American farmers. First and foremost, we lost a market that we had worked hard to build—and our competitors in Australia, Canada, and Europe were more than happy to fill the vacuum.
To compensate us for our losses, the Carter administration bought tons of wheat and corn, much as the Trump administration proposes to do with its new plan.
The command-and-control decisions of federal bureaucrats, however, cannot replace the genuine opportunities of functioning markets.
Carter’s grain embargo inaugurated a bad period for America’s farmers, as we suffered from low prices, inflationary pressure, and more. The embargo wasn’t the only cause of our troubles, but it amplified them—and the subsidies prolonged the pain rather than forced us to confront our challenges with effective solutions in real time.
So when I hear about a package of emergency aid in 2018, my mind turns to what I lived through as a young farmer: I’ve seen this movie before, and I didn’t like it the first time.
Also, where does the aid end? Although this trade war hurts farmers, we’re not alone. Will factory workers whose jobs depend on steel imports also receive relief? This could become costly.
What’s more, the aid package strikes at something fundamental. One of the things I enjoy about farming is that I’m my own boss—I get to make my own decisions about how to run my operation, reaping the benefits and handling the setbacks.
The administration’s plan, however, feels a bit like a handout. That’s certainly how the Washington Post Express portrayed it: “American bailout,” read its front-page headline, over the familiar image of the farmers in Grant Wood’s “American Gothic” painting, with the addition of Uncle Sam’s hand slipping a wad of cash into the overalls of the pitchfork-holding man.
I don’t want a bailout. I don’t want the government’s “help.” I just want to trade—to grow my crops as I please and to sell them to willing buyers, without the interference of politicians, including those who have good intentions.
Daniel Kelley grows corn and soybeans on a family farm near Normal, IL. He volunteers as a board member for the Global Farmer Network (www.globalfarmernetwork.org) where this column originates.
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A version of this column first appeared at The Hill on July 27.